On January 1, 2021, ABC Co. acquired 80% interest in XYZ, Inc. by issuing 5,000 shares with fair value of P30 per shareand par value of P20 per share. The financial statements of ABC Co. and XYZ, Inc. immediately after the acquisition areshown below:Jan. 1, 2021XYZ, Inc.10,000АВССо.Cash20,000Accounts receivable60,00024,00080,000150,00046,000InventoryInvestment in subsidiaryEquipmentAccumulated depreciationTotal assets400,000100,000(40,000)670,000(20,000)160,000Accounts payableBonds payableShare capital40,00012,00060,000340,000100,000Share premium130,000Retained earningsTotal liabilities and equity100,00048,000670,000160,000On January 1, 2021, the fair value of the assets and liabilities of XYZ, Inc. were determined by appraisal, as follows:CarryingFairFair valueXYZ, Inc.amountsvaluesincrementCash10,00010,000Accounts receivable24,00024,000Inventory46,00062,00016,000EquipmentAccumulated depreciationAccounts payableNet assets100,000(20,000) (24,000)120,00020,000(4,000)(12,000)148,000(12,000)180,00032,000The equipment has a remaining useful life as of 4 years from January 1, 2021. ABC Co. elects to measure non-controllinginterest as its proportionate share in XYZ's net identifiable assets. Compute for the consolidated asset.

Name: On January 1, 2021, ABC Co. acquired 80% interest in XYZ, Inc. by iss
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Description: On January 1, 2021, ABC Co. acquired 80% interest in XYZ, Inc. by issuing 5,000 shares with fair value of P30 per shareand par value of P20 per share. The financial statements of ABC Co. and XYZ, Inc. immediately after the acquisition areshown below

Step 1 Consolidated financial statements are the "financial statements of a group in which the…

Business

Accounting

he equipment has a remaining useful life as of 4 years from January 1, 2021. ABC Co. elects to measure non- hterest as its proportionate share in XYZ's net identifiable assets. Compute for the consolidated asset.

he equipment has a remaining useful life as of 4 years from January 1, 2021. ABC Co. elects to measure non- hterest as its proportionate share in XYZ's net identifiable assets. Compute for the consolidated asset.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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